JPMorgan warns of possible Q4 write-downs

- JPMorgan Chase & Co Inc on Friday said shaky credit markets could trigger more write-downs in the fourth quarter as the bank is exposed to about $50 billion worth of leveraged loans, risky subprime mortgages and collateralized debt obligations.

JPMorgan did not give any specific potential write-down figures in a quarterly filing. But the bank said unstable market conditions could affect results.

As previously disclosed, the bank's portfolio of held-for-sale leveraged lending commitments stood at $40.6 billion at the end of September. These commitments are hard to hedge against losses as the market for corporate debt used in leveraged buyouts has diminished substantially in recent months.

"Further markdowns could result if market conditions worsen for this asset class," the bank said in the filing.

In the third quarter, JPMorgan wrote down $1.3 billion, after fees, on the leveraged loan portfolio.

Meanwhile, the bank also may have to write down its portfolio of subprime mortgages and collateralized debt obligations or CDOs, whose downturn has walloped rivals such as Citigroup and Merrill Lynch & Co Inc.

JPMorgan's exposure to CDOs is about $6.8 billion and about $2.6 billion for risky subprime mortgages. CDOs repackage assets including mortgages and credit-card receivables into bond structures.